"We encourage customers to take the time to think about what they've signed up to and what they're expected to sign up to. They shouldn't feel obliged to agree to something or to buy services just because a salesperson makes contact with them."

The commission says the large fine should serve as a reminder to businesses that they can't flout the law.

A number of complaints raised red flags about Youi's sales practices.

"[Customers] could fill in some information online but then a salesperson would telephone them back. In the course of that telephone discussion, a number of misrepresentations were made," says Ms Rawley.

Youi pleaded guilty to 15 counts of misleading consumers, blaming the "actions of employees or processes".

Thursday's sentence followed a $100,000 fine imposed by the Insurance Council.